U.S. TESTS WATERS ON U.N. RESOLUTION AUTHORIZING ATTACK<BR>

The United States has readied a U.N. resolution that would authorize an attack on Iraq, diplomats report, and a Pentagon source says the Bush administration is sending more armored divisions to the Saudi desert.

Secretary of State James A. Baker III is sounding out allies this week about support for a military drive to oust Saddam Hussein's forces from Kuwait. He met Thursday in Moscow with President Mikhail Gorbachev.The Soviet foreign minister, Eduard A. Shevardnadze, said as daylong talks began that it would be undesirable to use force to liberate Kuwait.

But he refused to commit the Soviet government. "We'll be discussing all questions now and all options," he said. "I will not answer you now."

The U.N.-ordered embargo on trade with Iraq has failed to pressure Saddam into relinquishing the emirate he seized 14 weeks ago, and U.S. and British officials appear to be running short on patience.

On Wednesday, in her strongest statement yet, Britain's Prime Minister Margaret Thatcher said "time is running out" for a peaceful solution.

But Egyptian President Hosni Mubarak said in an interview that the U.S.-led multinational forces that have massed in Saudi Arabia to counter Iraq should give theU.N. sanctions "at least two to three more months," the New York Times reported Thursday. Baker met with Mubarak in Cairo on Tuesday.

Mubarak said he still hoped Iraq would review the situation and order a withdrawal from Kuwait to avert war.

"I cannot say I have lost hope. I hope that the Iraqi president would reconsider (his position). We do not want destruction or anything like this for Iraq."

Amid new talk of war in the Persian Gulf's oil fields, crude prices shot up nearly $3 a barrel on Wednesday to about $35.

In other developments, 74 Japanese freed by Iraq arrived Thursday in Tokyo.

Iraq on Wednesday promised to free 120 more hostages, including a few Americans.

Saddam has been releasing Westerners on a piecemeal basis, sometimes in blocks of a single nationality, in what many governments consider a bid to divide the anti-Iraq alliance.

At the United Nations, diplomats said Wednesday that the United States is testing the waters on a Security Council resolution that would authorize the use of military force to drive Iraq from Kuwait.

If such a measure were adopted, it would be an unprecedented step in U.N. history.

The text of the resolution has not yet been circulated because Baker is abroad trying to line up support for it, said the diplomats.

In Washington, a Pentagon source said late Wednesday that the Bush administration has decided to send additional armored divisions to Saudi Arabia soon to strengthen the U.S. military force in the region.

The source said most of the troops and tanks would come from Europe. A single U.S. armored division includes about 40,000 troops.

The United States currently has 230,000 troops in the region - facing some 430,000 Iraqi troops in Kuwait and southern Iraq - as part of a multinational force that numbers more than 300,000.

The British have contributed 9,000 troops to the force.

Thatcher told British lawmakers Wednesday that Saddam must understand that "either he gets out of Kuwait soon or we and our allies will remove him by force and he will go down to defeat with all the consequences."

"He has been warned," she added.

In Baghdad, Information Minister Latif Jassim denounced Thatcher, saying she was mentally unbalanced and possessed by the devil, the official Iraqi News Agency reported.

The agency also said that 100 Germans and 20 other foreigners, including an unspecified number of Americans, Britons and Italians, would be released following the intercession of former West German Chancellor Willy Brandt.